The terms “founder” and “CEO” refer to two different things. Oftentimes, they can be the same person in an organization, but sometimes it requires two separate individuals.

In this article, we take a look at the definitions for these two terms, as well as exactly how the two positions differ.

What is a Founder?

A founder refers to someone who starts a business. Since founders launch companies, they are also entrepreneurs. If more than one entrepreneur was involved in bringing the company into existence, they are referred to as “co-founders”.

The origin of the word founder is someone who forges steel; and so, in a similar way, the founder of an organization is “forging” a new entity.

An organization’s founders take an active interest in getting the business off the ground, as well as finding the resources to form the company and help it to succeed.

Listed below are some of the characteristics that a good startup founder should have:

  • Great relationship builder
  • Positive outlook
  • Ability to listen to feedback
  • Quick learner
  • Ambition
  • Integrity

A founder gets the idea for the business and acts on it. He brings resources, builds the team, goes out to find new customers, gets financing, focuses on the right products and services to sell, and so on. Whatever needs to be done, a founder rolls up their sleeves and gets the job done.

What is a CEO?

CEO refers to the highest-ranking executive manager in an organization. A CEO is someone who positions the company for scale. This person then delegates effectively to talented people on his team and then gets out of the way to let them do a really great job.

For the most part, CEOs spend their time “coaching” the team – so to speak – in order to bring out their absolute best.

Listed below are some of the characteristics that a good startup CEO should have:

  • Willingness to learn
  • Strong communication skills
  • Realistic optimism
  • Relationship building
  • Listening skills
  • Ability to take calculated risks
  • Adapting to various management styles

These are just some of the traits that a CEO needs to possess in order to become a good leader.

Seeing as the CEO has the authority to make final decisions for the business and is responsible for the entire organization’s overall success, it’s very important to ensure that the person chosen for the job exhibits these and other traits of a strong leader.

How Do the Positions Differ?

The main differences between the positions of founder and CEO come down to the relationship to the history of the business, as well as the specific responsibilities associated with each title.

For instance, the term founder is used to describe the creator’s relationship to the business’s history.

The term CEO, on the other hand, is all about the position of the person in the current hierarchy of the organization.

The founders will always be the organization’s founders. However, while some founders can be CEOs, they won’t necessarily be in that position forever.

The jobs of CEO and founder vary according to the different organizational needs.

In the beginning, it’s not uncommon for a founder to try to earn more revenue by blogging, edit and post YouTube videos, manage social media, and do whatever else is necessary to get the organization off the ground.

Once an organization is established and a CEO is part of the equation, it’s much less likely that they’ll focus on these things as they’ll have teams to help.

But although the daily tasks may differ, the overall vision for the two positions provides a framework that is quite consistent across different organizations.

These titles are a simple way for outsiders to easily understand how they can connect with an organization.

For someone at the head, you can simply use the title of “CEO”, or “CEO & Founder,” or “Founder/CEO”.

That way, people know who to approach with all things CEO. However, if you simply say you’re the founder, people may be left wondering as to what types of things they can contact you directly about.

What is a Startup’s Title Hierarchy?

According to statistics, over 75% of startups fail. One of the main reasons for this is failing to have the right team to make the business successful.

Below is an example of how startups typically structure their hierarchy of staff.

Source

However, when building a startup, it’s not just about hiring qualified people, it’s mostly about focusing on getting the right people for the roles that are essential to the company’s success.

So which roles are crucial for a startup’s success?

  • CEO (Chief Executive Officer) – Visionary
  • CTO (Chief Technology Officer- Innovator
  • Product – Director
  • Developer – Builder
  • Operations – Organizer
  • CMO (Chief Marketing Officer) – Marketer
  • CFO (Chief Financial Officer) – Money Manager
  • Sales – Money Maker
  • Success – Customer Champion

Summary

There you have it. The difference between CEO and Founder, as well as what each of their roles within the organization entails. Though the positions differ, they’re both an absolute requirement for an organization to have success.

What do you think is the best way to structure the title hierarchy of a startup? Let us know in the comments section below!

Ron Stefanski is an online entrepreneur and marketing professor who has a passion for helping people create and market their own online business.  You can learn more from him by visiting OneHourProfessor.com

Founder stock photo by fizkes/Shutterstock